townhouse investment property

The townhouse investment property aka House #3

So it had been a few years since I started accidentally building passive income with house #1. The tenants that I had, were happy renewing there third lease. I was making $650 a month like clockwork(which I discovered was way below market value). At the time I was running another business that was running well, and I was using the rent payments toward my mortgage along with my other income to pay off my new house fast. I think it took me 3 years to pay the hard loan off. I admittedly buckled down and focused on paying off my second house as fast as possible because, well I hate owing money. I actually didn’t really even take being a landlord serious, I would always fix issues with my tenants right away but I still wasn’t thinking of it like a business, but when my loan was paid off, I was suddenly actually generating $650 a month without doing any real work, it was awesome. I was beginning to tire of the business I was in, and begin looking into other ways to generate income. I soon realized that if I had more houses, Id have more passive income….duh! Im not sure why I didn’t think about it sooner, but as soon as I did, I was ready to buy another house.

I scanned daily for deals on properties, this time wasn’t going to be an accident, I was making a conscious decision to buy a rental property. A lot of the prices I was seeing, were high. If you know me I won’t buy it unless I get a deal. Finding a deal has always been one of my talents, so after a month of screening potential properties, I spotted a 2 bedroom, two story town home for 45K, for sale by owner. I knew by finding a direct owner to buy from I had a better chance negotiate my price. Whenever you go through realtors, there is a series of people you have to deal with, and it can be difficult to negotiate without the sellers realtor messing up negotiations. I normally would not be interested in town homes  because I didn’t want to worry about HOA fees. HOA Fees are the cost to maintain the property charged to each owner to keep things up. This particular townhouse did not have HOA fees, in fact it was similar to a house as each owner was responsible for there own property. I went to check it out, and it was great. I mean the last owner had a tenant who left the home a little dirty but, it didn’t need any repairs, just a good clean. I told the owner I was interested in the townhouse investment property, and would be in contact later in the day. To make sure I was getting a good deal, I went home and hopped on and researched what the other properties had recently sold for. They were averaging 40K needing minor work, but as I mentioned, I needed a deal. I called the owner and told him I wanted to make an offer of 37K, I figured at that price, I could replace the carpet, fix the minor drywall issues, and replace the carpet and still be under 40K. Fortunately the owner was wanting to sell and my offer was accepted, I sent him a contract and we scheduled a closing date about 20 days later.

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I was closing on my second rental property, and I was excited. I decided after much research that I was going to rent this property via section 8, it was in a decent neighborhood and I hoped to attract a responsible tenant. I checked with my county to see what the requirements were, as I had always been told section 8 is a lot of trouble to deal with, me being one to like to learn things for myself. I quickly found out that the requirements were just pretty much common sense stuff, i.e. all doors must be weather proofed, all outlets along countertops needed to be GFI compliant, no leaks, same stuff I’d do anyway no big deal. I listed my property in a few of rental websites, with pictures and began getting calls right away. I was very meticulous in the wording of my ad, knowing how to find good tenants, was essential to filter out the rift raft. I listed all my requirements, which were realistic, no violent felonies, renter must have atleast 2 years rental history, no evictions, and I was going to run a background check to verify. I wasn’t concerned with employment history or credit because the majority of people on section 8 have the majority of rent paid for them by the state. I located a tenant who was honest and passed the background check, now it was time to schedule the inspection  I scheduled an inspection, and waited. About a week, until someone was available to inspect my townhouse. The inspection was brief and, I was told I passed. I notified the tennant, and she has been there going on 3 years now. I was able to rent this property out for $850 per month. Now the combination of house #3 and House #1 were generating $1500 a month in rental income. I was officially and lanlord. I’ve heard a lot of “experienced” investors say that townhouses are bad investments, but now that I’m 3 years in, I’ve find this to be false, I LOVE my townhouse investment property. I believe that under the right circumstances anything can be a good rental.

start building passive income

How I Accidentally Started Building Passive Income.

House #1

I moved to Florida back in 2010 on a whim, I had a little money saved up, and I wanted to make sure my family had a gauranteed place to live. We were staying with my finance’s cousin until we could get on our feet. I spent my days looking for deals on property. After a few weeks I came across a private seller with an 3 bedroom home. The owner needed quick money, and only wanted 21K.  He was renting the property to tenants who were about to move. The tenants were very messy, and had about 5 pets.  The home had roaches and part of the floor coming up in the kitchen and all the carpet smelled like urine. I paid cash for the home and suddenly I owned property, this was house #1.  After purchase my fiancé and I ripped up the carpet and put some cheap carpet in it, we replaced the kitchen floor with some peel and stick tiles, and painted the walls. I wasn’t thinking about building passive income, but rather how much it was going to cost me to fix up.

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I think at the time I spent around $2000 on making the home livable. The house did what it needed to, it provided gauranteed housing for my family and I, the exterior was ugly and it was located in what could be described as an industrial area, and not very attractive. I loved the fact that I had a home, that I didn’t have to pay a mortgage on, all I had to worry about was the taxes which were low. We lived here happily for 2 years.

Fortunately the ambition in me always pushes me to want to upgrade things. I knew on the market I could sell the home for around 35K, and the type of house I wanted to upgrade to was around 65K. I began searching for houses again for about a month before I came across a gem in Clearwater, FL, in a super convient location, close to the Tampa bridge and the major highway in the area. It was a nice looking home with a for sale sign that read 69K with contact info. I called while I was sitting in the homes driveway, and spoke to Phil, who flipped homes for a living. Phil explained he bought this home in a lot of 10 houses from the bank, and that he was looking to sell immediately. I arranged to check out the inside, and was viewing the house the next day. It was a little outdated but I loved it. The location was PERFECT. I had about 30K saved up and I knew I could get close to 35K for my current house, so I immediately listed my home for sale and told Phil I wanted to make an offer of 57K. I figgured listing my primary home cheap it would sell fast, the same day that it was listed I got a call from a gentleman, who appeared to be interested in buying my house, what luck. The buyer told me he wanted to come take a look at my house immediately, and he did the following day. After his walk through he made a verbal offer of full price, luck was on my side.

Now before you rag on me for accepting a verbal offer, I want to just say in my defense, at this point I was new to this, no one ever thought me anything about real estate. But back to the story, the guy who was buying my home arranged to meet me the following Monday to sign the contract, I set up an appointment with a title company and was excited that I was a bout to move into my dream home. Unfortunately, my luck doesn’t usually work out as well as it appears, when Monday rolled around I did not hear from my buyer, I gave him a ring and was sent to the voice mail. WTF! He was just talking to me all every day. I called over the next few days probably somewhere near 30 times, this guy was obviously avoiding me. I hate unreliable people. Saddened, I decided to call Phil and tell him that I wasn’t going to able to get my dream house. Phil asked why, I explained to him what I had been through. Phil then suggested getting a loan, “my credit sucks” I said, but Phil had an answer for me, “what about a hard money loan?”. A hard money loan as I learned, is private loan through and doesn’t involve banks. Phil had a hard money lender named James that he introduced me to. Phil told me as long as I had 20% down  he would approve me and didn’t care about the credit. I just had to make interest only payments and I had 3 years to make a balloon payment. I could come up with the rest in 3 years, this sounded like a good plan. Now I wasn’t relying on selling my old house and I was able to move, but what was I going to do with two houses. The answer almost came like clock work, I could rent it out to cover the monthly payments while I saved up for the balloon. I didn’t realize it then but I was laying the pavement to the road to retirement. I listed my home on craigslist for rent for $650 and found a prospective tenant immediately. I made sure to take the right steps to find a good tenant.  I was happy I was now generating $650 per month without doing anything. I was building passive income. The payments rolled in like clock work and I was able to cover my payments which were $475 a month and still saving $175 toward the balloon without any work. This random chain of events was crucial and a staple in the beginning of my career as a real estate investor, this is how I accidentally started building passive income. My home was now an income generating asset, and no longer a liability.

This is around the time I had just finished up reading Rich Dad, Poor Dad, by Robert T. Kiyosaki which is an excellent read, frankly the man is a genius. If you are interested in building passive income, I highly recommend reading it if you are looking to get into real estate investing. The book itself isn’t going to teach you any real estate methods, however it changed the way I thought about home ownership vs owning properties that allowed me to begin building passive income.

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Uber launches car rental program with Enterprise

In an attempt to gather further share of the ride share community Uber launches car rental program with enterprise. It Ubers latest effort to get more drivers on the road, and in business.

The program, launched in Denver, and is expected to expand across the US. The pilot program gives people access to a discounted rental car at $210 a week, plus taxes and  of course fees. The popular ride sharing company is marketing this as an intuitive way to help drivers who can’t afford a car but want to drive for Uber, however it does not come with out hoops to jump through, red tape, and strings attached. Some of the requirements include coming up with a $500 refundable deposit, and a non refundable $40 start up fee. In addition if drivers go over 2800 miles per month or just 90 miles per day, a $0.25 per mile fee is added on to the bill

Uber says, Drivers can rent low-mileage Nissan Sentra, Hyundai Elantra, Toyota Corolla, Chevy Cruze or Ford Focus vehicles. The initial rental agreement last for 1 week, if the driver keeps there account in good standing, this can be extended to 4 weeks at the max, as drivers must return the cars monthly for a mandatory vehicle inspection. The program is aimed at “would be Uber drivers, who don’t have a car, or that own a car but does not meet Ubers minimum requirements.

This isn’t the first time Uber has reached out to other companies to get more drivers on the road. In 2014 Uber partnered with companies like GM to provide drivers with auto loans. This venture was cut short when those partners underwent federal investigation for handing out subprime loans. One bonus to this program is that drivers are not required to obtain additional insurance as this in all included in the price.

While I am a fan of driving for uber, I believe drivers should evaluate if this type of program is right for you, on your journey to create income, this can be valuable if handled responsibly, but the risk of not being able to cover the fees after slow week could be detrimental, especially if you are new to uber. I suggest browsing the web for other opinions before your make this hasty decision to find out what its like to drive for uber before you sign any paper work. On the other hand if you have plenty of time and you need to start making money to fund other investments, this is a good way to start generating income. Sign up to drive for Uber here and get a $50 sign up bonus. And if you have never used uber and want to click here to take your first ride for free up to $15

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The Uber Experiment – What it’s like to drive for Uber!

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What is Uber

If you have never heard of Uber, it is an extremely intuitive app that will undoubtedly change life as we know it. It’s what a taxi should be in 2015. You simply download the app, enter your payment info(even accepts paypal), and the app automaticly recognizes your location using the GPS technology in your phone and uses it to send a driver to your location. You are able to input your destination upon requesting your ride, so when the driver pulls up, he already knows where to take you. On top of that drivers are always all around in most areas, it generally takes about 7 minutes for your driver to show up so be prepared. This is insanely useful for nights out on the town, or rides to and from the Airport. If you have not used uber here is a Promo Code to get your first ride free up to $20. Taking Uber is the most responsible way to go out drinking, but today Im going to share what it’s like to drive for Uber.

Why I decided to drive for Uber

Theres 3 things that you should know about me. I hate thinking “inside the box”, I hate being confined to a schedule, and that I’ll try anything once. That being said when a friend of mine bragged about how he was making a killing with Uber, I thought to myself, I wonder how can I drive for uber?  And if I can make decent money doing it. That being said, I knew that it was something I wanted to look into. I immediately went home logged on to the Uber website to see what the requirements were. Because Im quite impulsive, I signed up for Uber on the spot. I was ready to try it, however my adrenaline rush was soon cut short as I realized this was going to be a process, starting with a background check. I quickly entered my personal info, there was a section that required me to take pictures of my drivers license and insurance info, I quickly submitted all of the required docs to get on the road. I tied up all the loose ends on the website and now All I had to do was wait…so I waited….and waited…and waited for about 2 weeks, until one day while I was shopping in the mall, and happened to glance at my iPhone. Opening my mail app revealed I had an email from Uber support with the subject approved, I was ready to drive. I quickly followed the links in the email to download the Uber drivers app, as it’s not available in the app store, and after 1 minute the app was on my phone, I decided to drive home before I tried it out, as I was currently on a tight schedule.

My first ride as an Uber Driver

Fast Forward to about 7 p.m. not really knowing what to expect, I opened the app and saw the Go Online button, I was feeling mixed emotions, somewhere between being extremely nervous, and excited. I decided to go outside and clean my car and get it prepared for the first ride, I made sure to take my iPhone with me to make sure that I didn’t miss anything. Around 7:04 p.m. I heard a series of short beeps coming from my pocket. I grabbed my phone and saw a stick figure with a circle quickly disappearing, on a timer. I immediately clicked it and my phone displayed the location of my first pick up. He was about 4 minutes from my house. As I left, I wondered how to contact him to let him know I was there. Since I didn’t want to be late, I left without hesitation and arrived promptly at the riders home. Another glance at my phone revealed that the app notified the customers of my arrival when I got a few feet away from the destination. After about 2 minutes, a tall man in his mid 40s opened the door and started walking towards the car, I unlocked the doors and let him in,  he sat down in the front seat.  I greeted the uber rider, who’s name was Dan and clicked the start ride button on my phone, and directions to his destination were displayed on the phone. I know the area he’s going to, so I proceed to the route. After a while he ask me, how long Ive been driving. “Your literally  my first ride” I replied. There was an akward laugh, and some following small talk, but nothing out of the ordinary. We arrived at the destination, Dan gave me a $5 tip, and hopped out and assured me he would give me a 5 star rating. I clicked the end ride button, and was asked to rate the driver, I gave him a 5 star rating because he was a nice enough guy. Then my fare was displayed $9.32. So this was  what it’s like to drive for Uber I thought! I headed back to my home, 2 minutes into my journey I received a second call. It was in route to wear I was going anyway. After 2 minutes I pulled up at the new location, and waited. After 10 minutes no one came out at all. The Uber app said the rider had been notified. I decided to email Uber since they did not have a contact number, I was quickly emailed back and told if a rider doesn’t show within 5 minutes I could cancel the ride and would be given a $4 No show fee. It worked, and within 3 minutes I had another call. Uber was definitely profitable. I took about 3 more rides before calling it a night.

How much I made driving for Uber

Over the next few days I learned a lot. I got comfortable talking with the riders, and learning tips and tricks, to maximize my profits with Uber. Especially when the weekend came. Friday night my first ride was taken to the area of town where all the clubs and bars are. After dropping off that rider, at  crowded bar, in the Soho area of Tampa. I got another call within seconds of his drop off. This appeared to be the theme of the night. Every time I dropped someone off I had a new ride request immediately. I decided to work until 2am. As I drove home drowsy from my night of running all around Tampa’s party scene, I checked my earning to discover I had earned $127. My first week I drove every night for about 4 hours. And about 5 hours every day of the weekend. When monday rolled around I was sent an earnings report from Uber. After 50.3 Hours online out of which I had only spent 25 legitimate hours driving, I had earned $593.47, Not bad for a week! I ended up with just shy of $2400 for the mont

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What it’s like to drive for Uber

The next few weeks were similar, and I know what you really want to know is how much did I earn with Uber, after all thats why your reading this, well I was earning close to $2400 on average driving for Uber, and got my self on a schedule. I knew the hot spots to be at to receive the most calls, I knew that nights were more profitable than days, and I knew how to build a rapore with the customers. The number one thing people always ask me as an Uber driver is whats the weirdest experience Ive had. At this point I have so many stories it’s crazy, I’ve had a guy fall asleep in the car and wouldn’t get up, Ive had a woman hop in my car half naked, Ive had a couple make out in the back seat, and on Halloween I had a man dressed in speedos and a batman cape hope in my car. All in all it’s been safe, fun, and a memorable experience. One time I had a young lady in my car who partied to hard at the bar and threw up on the side of my car, while this was extremely gross, Uber was extremely responsive and issued me $50 the next morning to get my car wash, which only cost me $20. In reality it’s like I profited $30 to get my car thrown up on…Ill take that.

Below is a copy of Ubers driver requirements

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Part 2 of The Uber Experiment coming soon…

I will keep you updated on my uber experiences as they unfold, in part 2 of this blog. If you would like to become an Uber driver, you can sign up to drive for uber here. If you sign up through this link Uber will give you $50 just for signing up and taking your first ride, so you can find out for yourself what it’s like to drive for uber. I highly recommend it as a way to build up your savings for bigger and better investments, if you are looking to make money and your at ground 0, this is a great way to start.